News broke Tuesday that Google’s market capitalisation has hit US$4 trillion, making it the second largest company in the world after Nvidia.
Its share price has roughly doubled over the past nine months after the only serious threat to its business, the prospect of being broken up by US courts, ended with a highly favourable ruling.
Taken together, this means Google’s market cap has increased roughly 140-fold since it listed in 2004 at around US$28 billion.
Now America’s most profitable company, I suspect Google’s market cap can rise 25-fold and reach US$100 trillion given another 22 years.
Much as Google held pole position on the defining technology of the 2000s and 2010s, the internet, it also holds pole position on two defining technologies of the 2020s and 2030s: AI and self-driving cars.
How we got here: Search and YouTube are media monopolies
Understanding how we got here requires understanding the economics of legacy media.
Newspapers and television stations create audiences and then sell access to those audiences to advertisers. Before the internet, this was a very profitable business model.
Like a newspaper or TV station, Google’s core product is an audience, which it then sells to advertisers. (Roughly 80% of its revenue comes from advertising.) Robert G. Kaiser, the celebrated journalist, wrote a famous essay about exactly this for The Brookings Institute back in 2014, which contained the graph below.
Unlike legacy media, Google Search pays almost nothing to the creators of the content that attracts those audiences in the first place. (YouTube does share revenue, however). This imbalance sits behind regulatory efforts such as Australia’s News Media Bargaining Code.
The result is exceptional profitability. While not provided in Google’s reports, Search is widely believed to operate on gross margins above 50%, and YouTube above 30%, all while delivering low double-digit revenue growth.
It is difficult to see how this is disrupted. Courts would need to force a Bell System-style breakup, which now appears unlikely given recent rulings. Or a competitor would need to assemble a larger and more precisely targeted audience and sell it to advertisers more cheaply. Given Google’s data advantage, that outcome looks unlikely.
How Google gets to US$100 trillion by 2048
Gemini 3 now outperforms rival large language models on many benchmarks, according to LMArena. Improved technical performance has helped underpin Google’s recent share price re-rating.
What excites Wall Street more is distribution. Google can deploy Gemini across an installed base of more than two billion users through products such as Gmail, Chrome and Android. None of its competitors enjoy a comparable advantage.
The more significant opportunity lies in the next phase of AI, often referred to as agentic AI. In this world, Gemini evolves beyond a sophisticated autocomplete engine into something closer to a digital worker like Cortana in Halo or JARVIS in Iron Man, able to plan, act and execute tasks independently.
If Google succeeds, it begins to address a far larger market. Today, the ceiling on Google’s advertising business is defined by global advertising budgets, which even in aggregate amount to hundreds of billions of dollars. Google has long understood this limitation, which explains its sustained investment in optionality through its moonshot projects.
Agentic AI shifts the opportunity set from advertising spend to global labour spend, measured in the tens of trillions. Even modest penetration of that market would support a dramatically larger valuation.
Self-driving cars
Waymo hit an inflection point last year, crossing 14 million trips. This is triple the number in 2024. And it has done this on a much stronger safety record than Tesla. In Austin, Texas, where they go head-to-head Waymo has had one crash every 400,000 miles compared with one every 50,000 for Tesla. In 2026, Waymo is being rolled out in 20 new cities.
Falling lidar costs fall this decade, as has already occurred in China (Baidu’s lidar costs have dropped from US$75,000 to US$500 per car) will strengthen Waymo’s hand further.
It allows Google to benefit from a positive cost flywheel, much like Tesla did with lithium-ion batteries the past decade.
Waymo’s integration with Google Maps is the final piece. Google Maps has more than two billion monthly users and can feed Waymo high-quality live traffic data. Maps also function as point of sale. When a user searches for a destination, Google can offer a Waymo ride instantly.
Access Google with HUGE, BEST and WWW
For those interested in Google, our ETFs, the ETFS Magnificent 7+ ETF (HUGE), ETFS US Quality ETF (BEST), and ETFS US Technology ETF (WWW) take some of the largest positions on Google of any index ETFs in Australia.
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